IPhone created ‘crisis of design’ at Samsung

SAN JOSE – A Samsung executive said the company had a “crisis of design” because the difference in user interfaces on the iPhone and Samsung handsets were like “Heaven and Earth.” The executive spoke in an email that Apple was able to admit as evidence over objections from Samsung in their patent infringement cases here.

“We’ve been paying all our attention to Nokia…[but] when our [user experience] is compared to the unexpected competitor Apple’s iPhone the difference is truly that of heaven and earth...it is a crisis of design,” said Hye-Sun Kim in an internal Samsung email. Kim's title and role at Samsung at the time the email was sent was not immediately available

“I hear things like this: Let’s make something like the iPhone…The iPhone has become the standard,” Kim said in the email. “Do you know how difficult the [Samsung] Omnia [handset] is to use?” he asked

Apple suggested the email represents an example of a senior Samsung executive encouraging patent infringement. Samsung countered the email is an example of hyperbole used in the company’s internal communications to encourage aggressive competition to emulate successful products.

Under cross-examination, Samsung attorneys noted Kim said later in the same email, “I have confidence in our products’ [hardware], in their exterior design and quality, but when it comes to the ease of use of the [user experience] I lack such confidence,” Kim wrote.

Kim also suggested Samsung use larger, more advanced displays as one way to compete with the iPhone.

“Our most important asset is our screen,” Kim wrote. “It is important that we make the screen size bigger and in the future we will absorb even the function of ebooks,” Kim added.

In testimony, Justin Denison, chief strategy officer for Samsung Telecommunications America, said the email was in its style typical of internal Samsung communications.

“I would say Samsung is unique from other companies I’ve worked for in that Samsung remains very humble and self-critical and creates a sense of urgency to drive hard work so it never rests on its laurels and becomes complacent,” said Denison who has worked 16 years in mobile including stints at Nokia, Texas Instruments and Motorola. “We celebrate wins very briefly and move on to the next challenge,” he said.

“I find it very offensive,” Denison said. “We are very proud of the products we produce and all the hard work it takes to bring those products to market,” he added.

Denison said Samsung was first in the U.S. market to launch a handset using voice recognition, super active-matrix OLED displays and cloud-based video services. Samsung attorneys noted the Omnia was a Windows Mobile handset.

So it looks like Samsung will be using US origin employees to defend itself against Apple - just to neutralize their accent / culture / showmanship advantages. But the judge seems to be an Asian - American.

I believe the ethnicity of the judge is irrelevant.
But on another matter: here is another piece of Apple's case that I find neither surprising nor egregious. So an executive at Samsung gave a very frank assessment of how its handsets didn't measure up to the iPhone? I would assume similar emails are sent at every company trying to keep pace with the iPhone. For that matter, I would expect that similar emails are sent in any company that is chasing another one and clearly getting it's tail whipped. Is analyzing a market leading product and trying to top it the same as copying?

Today's announcement by Apple that it will no longer support "YouTube app" is a case in point. If Apple is resting on its laurels (unlike Samsung) it will soon feel the heat from users. They should look at what happened to Blackberry.
While comparison between Samsung and Apple seems fair, let us not forget that Apple only serves a niche market while Samsung recently replaced Nokia as World No.1. Apple cannot dream about such status in the near future.
As of 2011 Samsung sold 329 million units compared with 93.2 million of Apple. Also Samsung revenue for 2011 was about double that of Apple. The per unit income for Apple is high, but it serves just a small group of users.

Samsung gained market share at Apple's expense, but another article on eetimes.com says that Apple earned 71% of all handset profits last year, compared to only 37% of all handset profits for Samsung.
Who is beating whom?

It is my understanding that Apple initiated this lawsuit... Samsung is counter-suing. There have been reports on this website that Samsung is now the global leader in smartphone sales... interesting that Apple is suing now that they have lost their lead.

@Frank- it's true that an analyst report indicates that Apple took home 71 percent of all handset profits last quarter while Samsung took 37 percent (the total adds up to more than 100% because a bunch of companies, including RIM and Nokia, lost money).
http://www.eetimes.com/electronics-news/4236110/Analyst--Apple-took-80--of-handset-profits-in-Q4
On one hand, you could say "Apple is still bringing home the bulk of the profit so what's the big deal?" But the trend line is clear. In Q42011, Apple took 80 percent of handset profits. This comment is not meant to defend Apple's overall behavior in this situation, but I think the numbers do support the claim that Samsung's success is cutting into Apple's sizeable profit. Any company would act to try to stop this.

Well, I just wish that Apple try to stop its profit erosion by innovating at yet another higher level rather than to take the fight to the legal trenches. Imagine the benefits it would have brought to consumers. No prize for guessing who will be the biggest winner in current state of affair.

Ha! So Lets suppose Apple creates a new innovative product iX. What would Samsung do, it will copy all the utilities & features of iX and produce it in all possible sizes it can.Then they say they are very proud of hard work it takes to copy & implement in their own products.